Missouri Credit Union Association - interagency propsed rulehttps://www.mcua.org/taxonomy/term/2459
enMCUA Raises Concerns About QMs, Disparate Impact in Comment Letter on Credit Risk Retentionhttps://www.mcua.org/node/1579
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"><p><span style="line-height: 1.3em;">The Missouri Credit Union Association (MCUA) has filed a <a href="https://www.mcua.org/sites/default/files//files/Compliance/CommentLetters/2013%2010%2030%20FRB%20QRM.pdf" target="_blank">comment letter</a> on an interagency proposed rule regarding credit risk retention, including a proposed definition of “qualified residential mortgage” (</span>QRM<span style="line-height: 1.3em;">), which is identical to the </span>CFPB’s<span style="line-height: 1.3em;"> “qualified mortgage” (QM) definition. Our overarching concern is&nbsp;</span><span style="line-height: 1.3em;">that we do not think the QM/</span>QRM<span style="line-height: 1.3em;"> should become the only type of mortgage that regulators will permit or that the secondary market will&nbsp;</span><span style="line-height: 1.3em;">accommodate</span><span style="line-height: 1.3em;">. However, absent some flexibility for creditors under the rule, that is&nbsp;</span><span style="line-height: 1.3em;">precisely what we believe will happen.</span></p>
<p>We are also concerned about disparate impact issues that we believe will inevitably develop because lenders are incentivized under the rule to generate only QM/QRM loans. The statement on disparate impact that the agencies issued in October is undoubtedly well intended, but few believe it will provide any practical relief or protection if a lender is challenged in court by a consumer who likely should have received a mortgage absent the debt-to-income or other requirements.</p>
<p>We strongly oppose the QM-Plus alternative to QRM considered in the proposal, and urge the agencies to drop it, as we believe significantly fewer loans would qualify as a QRM and be exempt from risk retention under this alternative. We believe the QM-Plus approach would have&nbsp;<span style="line-height: 1.3em;">a negative impact on many credit unions defined as small creditors under the </span>CFPB’s<span style="line-height: 1.3em;"> QM rule, and the members of these credit unions. If the agencies choose to pursue QM-Plus, we urge them to modify the standard in a way that alleviates the very real concerns described in our letter.&nbsp;</span></p>
</div></div></div><div class="field field-name-field-vocab-legislation field-type-taxonomy-term-reference field-label-above"><div class="field-label">Vocab Legislation:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/taxonomy/term/198" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">new</a></div><div class="field-item odd"><a href="/taxonomy/term/1331" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">MCUA</a></div><div class="field-item even"><a href="/taxonomy/term/2457" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">qualified mortgage</a></div><div class="field-item odd"><a href="/taxonomy/term/2458" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">qualified residential mortgage</a></div><div class="field-item even"><a href="/taxonomy/term/2459" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">interagency propsed rule</a></div></div></div><span class="a2a_kit a2a_target addtoany_list" id="da2a_1">
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</script>Tue, 05 Nov 2013 18:58:11 +0000Nora Holloway1579 at https://www.mcua.orghttps://www.mcua.org/node/1579#comments